I receive press releases frequently and am always interested in the ones from Dr. Jerome Corsi. I thought I would share this one with you. With healthcare Obama-style about to be passed, don’t suspend the belief that anything cannot happen. I like to keep you informed on things that we hope would never happen.

From Dr. Corsi

Dominique Strauss-Kahn, head of the International Monetary Fund, or IMF, called for the creation of a new IMF-based one-world currency to replace the dollar as a reserve asset in world trade. Speaking at the Bretton Woods Committee meeting in Washington on Feb. 26, Strauss-Kahn cautioned against continuing an international monetary system that was dependent upon the dollar.

“And one day, the Fund might even be called upon to provide a globally issued reserve asset, similar to – but in important respects different from – the SDR,” Strauss-Kahn said. “That day has not yet come. But I think it is intellectually healthy to explore these kinds of ideas now – with a view to what the global system might need at some time in the future.”

This new call for an IMF-based one-world currency adds support to the G20 decision in April 2009 to move in that direction. Red Alert (Dr. Corsi’s site) cautions readers that the increasingly direct calls for a one-world currency to replace the dollar in international trade signal an uneasiness international bankers have with relying upon either the dollar or the euro as the standard for world trade.

With China dominating world trade, having amassed over $1.75 trillion in foreign-exchange reserves largely through manufacturing low-cost goods, the Chinese are increasingly unwilling to bet upon the soundness of dollar holdings, given the debt position of the United States.

G20 London meeting endorsed IMF one-world currency. Red Alert has previously reported that Russia and China championed the idea to use the IMF’s Special Drawing Rights as a new international currency as a proposal that was adopted by the G-20 meeting held in London in April 2009.

That G20 summit meeting took an important step to create a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world’s foreign-exchange reserve currency of choice.

Point 19 of the final communiqué from the G20 summit specified that, “We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity,” taking the first steps forward to implement China’s proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign exchange currency to replace the dollar. What are Special Drawing Rights?

The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange-rate system. “The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place,” a document on the IMF website explains. “Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.” When the Bretton Woods fixed-rate system collapsed, major world currencies, including the dollar, shifted to a floating exchange-rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.

Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation-states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.

The discussion of using SDRs as an international reserve payment system is further evidence that the momentum to create a one-world currency is gaining among not only among academic economists, but also among and professional economists holding prominent government positions.

Who is Robert Mundell?

Red Alert previously reported that strong support for the idea of a one-world currency has been consistently championed by Columbia University economics professor Robert Mundell, widely regarded as “The Father of the Euro.” He has argued for decades the proposition that nation-state currencies, including the dollar, need to give way to a new official world currency. For his work in defining the “optimal currency area” as being defined by international free-trade areas and regional markets, instead of nation-states such as the United States of America, Mundell won the Nobel Prize in economics in 1999.

Mundell’s argument is that nation-states are not optimal currency areas because nation-state borders are artificial constraints that are imposed on the globe to create ethnic or historical divisions that do not necessarily represent how international markets operate. To understand the concept, Mundell cites former Federal Reserve chairman Paul Volker’s frequently quoted dictum that, “A global economy needs a global currency.” For globalist economists, multinational corporations add currency risk simply because their companies operate in many different nations.

Currency risk is defined as the possibility that holdings in one particular nation-state currency may depreciate in value against the currency of the nation-state in which the corporation is based, resulting in a business loss from the currency fluctuation itself, not from a downturn in the company’s primary business activities.

A regional or one-world currency would eliminate currency risk because prices in all countries operating in the market area would be denominated in the same currency unit.

Mundell is on record urging that the IMF fund Special Drawing Rights to replace the dollar as the standard for holding foreign-exchange reserves that result from international trade transactions.

Tags: Bob Brooks, Dr. Jerome Corsi, health care, International Monetary Fund, one-world currency, Red Alert